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25 Need-To-Know Key Performance Indicators by Bernard Marr

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Chapter 7

Net profit

  • Why: To better understand your financial bottom-line performance
  • What: To measure how much money is left after all costs have been deducted from overall sales revenues
  • When: When investors and managers want to understand how profitable a business is
  • The question this indicator helps you to answer: to what extent are we generating bottom-line results?

Why does this KPI matter?

Profits are important for all businesses, regardless of whether they are in the private or public sector. Simply put: the very nature of business is to produce goods or services that you can sell for a financial return or reward. Taking away the costs of producing goods and providing services from the revenue or sales you are generating will leave ...

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